Business grants can be a valuable source of funding for small businesses, providing financial support without the burden of repayment. Whether you're a startup looking to launch or an established business seeking to innovate, understanding the different types of grants available and how to apply can improve your chances of securing funding.
In this guide, we’ll explore business grants for small businesses, including government schemes, sector-specific grants, and application best practices. By understanding the eligibility criteria and preparing a strong application, businesses can access funding to support growth, innovation, and job creation.
What are business grants?
A business grant is a non-repayable source of funding provided by the government, local authorities, or private organisations. Unlike loans, grants do not need to be repaid, making them an attractive option for businesses looking to expand, invest in new technology, or develop innovative products.
There are two main types of grants available to businesses:
- Direct grants – These provide businesses with a set amount of funding to cover specific costs, such as hiring employees, purchasing equipment, or developing new products.
- Matched funding grants – These require businesses to contribute a percentage of the funding themselves. For example, if a grant offers £5,000, the business must also invest £5,000.
While grants offer financial support without repayment, they often come with strict eligibility criteria and competitive application processes. Businesses must demonstrate how the funding will be used and how it aligns with the grant provider’s objectives.
💡 Tip: Research different grant providers and ensure your business meets the eligibility criteria before applying.
Types of business grants in the UK
There are several types of business grants available in the UK, each designed to support different industries, business activities, and growth objectives. Understanding which grant best suits your needs can help you identify the right funding opportunity for your business.
Government Grants
The UK government offers various grants to support businesses in areas such as innovation, sustainability, and job creation. These grants are often available at the national, regional, and local levels.
- Innovate UK grants – Funding for businesses focused on research and development (R&D), innovation, and new technology.
- Regional growth fund grants – Available to businesses in certain areas to support economic development and job creation.
- Apprenticeship grants – Support for businesses that hire and train apprentices, helping to cover wages and training costs.
Innovation and R&D grants
Businesses that develop new products, services, or processes can access grants to support research, testing, and implementation. These grants are often targeted at industries such as healthcare, renewable energy, and technology.
- Smart grants (Innovate UK) – Support for innovative and disruptive technologies.
- Biomedical catalyst grants – Funding for medical research and healthcare innovations.
- Energy efficiency grants – Support for businesses investing in energy-saving initiatives.
Regional & sector-specific grants
Many grants are available only to businesses in specific industries or geographic regions. These grants aim to stimulate local economies and support key sectors.
- Local Enterprise Partnership (LEP) Grants – Available in various regions to support business growth and job creation.
- Creative industry grants – Funding for businesses in media, design, and the arts.
- Agricultural & rural business grants – Support for farming and rural enterprises.
Export grants
Businesses looking to expand into international markets may be eligible for funding to help with overseas trade, marketing, and export-related costs.
- Department for Business and Trade Export Support – Helps businesses expand their global reach.
- UK export finance – Provides financial support for businesses trading internationally.
💡 Tip: Some grants require businesses to match funding, so be prepared to contribute a percentage of the total cost.
Who is eligible for a business grant?
Business grants in the UK come with specific eligibility criteria, which vary depending on the provider and the purpose of the funding. Before applying, it’s essential to understand whether your business qualifies.
Common eligibility criteria
Most grants assess businesses based on:
- Business size – Many grants are aimed at small and medium-sized enterprises (SMEs) with fewer than 250 employees.
- Sector – Some grants target specific industries such as manufacturing, tech, renewable energy, or creative businesses.
- Location – Certain grants are region-specific, aiming to boost economic development in particular areas.
- Purpose of funding – Grants typically focus on activities such as research and development, exporting, sustainability projects, or job creation.
Key considerations before applying
- Match funding requirements – Some grants require businesses to contribute a percentage of the funding themselves.
- Compliance obligations – Businesses may need to report on how the grant funds are used and demonstrate progress towards agreed objectives.
- Competition for funding – Grants are often highly competitive, and applications must clearly justify why the business deserves funding.
💡 Tip: Carefully read the eligibility criteria before applying, as applying for a grant you don’t qualify for can be a waste of time and resources.
How to find business grants
With a variety of grants available across the UK, knowing where to look is key to finding the right funding for your business. While some grants are widely advertised, others require research to uncover opportunities specific to your industry or location.
Where to search for business grants
- GOV.UK business finance support finder – A government tool that helps businesses find available grants and funding schemes.
- Local Enterprise Partnerships (LEPs) – Regional organisations that provide grant funding and business support to companies based in specific areas.
- Local authority websites – Councils and devolved governments often offer grants for small businesses, particularly in areas targeted for economic growth.
- Industry-specific organisations – Some trade bodies and sector organisations provide grant funding for businesses within their industry.
- University and research grants – Many universities partner with businesses to offer innovation grants, particularly in science and technology fields.
FSB Finance Hub
The FSB Finance Hub provides small businesses with expert guidance on business funding options, including government grants, loans, and alternative finance solutions. Exploring FSB’s finance resources can help businesses identify the most suitable funding opportunities.
💡 Tip: Some grants have application windows that open only once or twice a year, so staying updated on deadlines is essential.
How to apply for a business grant
Applying for a business grant requires careful preparation and attention to detail. Many grants have strict application criteria and deadlines, so having a well-prepared submission can increase your chances of success.
Steps to apply for a business grant
- Research grant requirements
- Check eligibility criteria, deadlines, and required documentation before starting an application.
- Ensure the grant aligns with your business objectives and funding needs.
- Prepare a strong business case
- Clearly explain how the grant will be used and the impact it will have on your business.
- Provide financial projections, market research, and details on expected outcomes.
- Gather supporting documents
Commonly required documents include:
- Business plan
- Financial statements and forecasts
- Proof of business registration
- Details of any match funding (if required)
Complete the application accurately
- Follow all instructions carefully and provide clear, concise answers.
- Address all assessment criteria and demonstrate how your business meets the grant’s objectives.
Submit before the deadline
Many grants have limited funding, so applying early can improve your chances of securing funding.
💡 Tip: Keeping a copy of your application and reviewing feedback from previous applications can help refine future submissions.
Grant writing tips for a successful application
With many businesses competing for limited funding, a strong grant application can set you apart. Here are some key strategies to improve your chances of success.
1. Align your application with the grant’s objectives
- Clearly demonstrate how your business aligns with the goals of the grant provider.
- Highlight how the funding will contribute to job creation, innovation, sustainability, or economic growth.
2. Be clear and concise
- Avoid jargon and provide straightforward explanations of how the funding will be used.
- Use bullet points or short paragraphs to make key points stand out.
3. Provide strong financial justifications
- Include detailed budgets and financial projections to show exactly how the funds will be spent.
- If match funding is required, clearly state how your business will contribute.
4. Showcase the impact of the grant
- Explain the measurable benefits of the funding, such as increasing revenue, expanding services, or creating jobs.
- Where possible, use data or case studies to support your claims.
5. Get professional advice
- Consider seeking feedback from a business advisor, accountant, or grant-writing specialist to strengthen your application.
💡 Tip: Many grants require a follow-up report on how the funds were used, so keeping clear financial records is essential.
Next steps
✔ Research funding opportunities – Look at government, regional, and sector-specific grants.
✔ Check eligibility criteria – Ensure your business meets the grant provider’s requirements.
✔ Prepare a detailed application – Clearly demonstrate how your business will use the funding and its potential impact.
✔ Explore alternative funding – If grants aren’t an option, consider loans, crowdfunding, or investor support.
✔ Use expert resources – The FSB Finance Hub offers guidance on grants and other funding solutions for small businesses.
Business grants can provide vital funding to support growth, innovation, and job creation, but they often come with strict eligibility criteria and competitive application processes. Taking the time to research the right grants, prepare a strong application, and explore alternative funding options can improve your chances of securing financial support.
By understanding the funding landscape and taking a strategic approach, small businesses can access the financial support they need to succeed.